Apple (NASDAQ: AAPL) wants to get beyond AT&T (NYSE: T) outlets to sell its new iPhone. So, it will turn to consumer electronics giant Best Buy (NASDAQ: BBY).
The new distribution deal has significant risk. Part of the iPhone's appeal is that it is not as "easy" to get as other handsets. Apple and AT&T are the only sources for the device. To some extent, that makes it "special" in the consumer's mind.
Putting the iPhone into a large chain of stores that sell hundreds of devices including a large number of cellular handsets turns the iPhone into a bit of a commodity. While it may help sales some, it may take away part of the product's luster and its image as a superior handset product.
Broad distribution worked for the iPod. Whether it will be good for the iPhone's branding remains to be seen.
Douglas A. McIntyre is an editor at 247wallst.com.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Reader Comments (Page 1 of 1)
8-13-2008 @ 10:22AM
Beltway Greg said...
Great get Doug. Your a regular Edward R. Murrow.
How are things inside of the dark cloud?
Beltway Greg
8-13-2008 @ 10:59AM
Gandhi said...
Like selling ipods at BestBuy and WallyWorld is really hurting Apple's premium image
8-13-2008 @ 12:43PM
realitybites said...
I read this guys blog and can't help but laugh out loud at his observations just about everyday.
This guy is always wrong.
Not sometimes.
Everytime.
How does he make a living?
8-13-2008 @ 3:43PM
Jeff said...
I think he makes a living playing you all for fools. At least dear God, I hope so for his sake.
8-13-2008 @ 8:16PM
Beltway Greg said...
Doug,
Didn't have time earlier but let me help you with your next post. Here are some ideas so you don't have to reconstitute a press release.
a. Speculate as to how many Iwhatevers Apple will sell at Best Buy and how much revenue that'll generate.
b. Speculate as to how much revenue they will get from this arrangement.
c. Gene Munster speculated that Apple sells something like 90 IPhones at each Apple store/day. Here comes the difficult part: determine how many Best Buys exist in the good ole US of A and how far most of them are from the Apple stores? Does this pairing make sense strategically? Could they possibly cannibalize existing sales?
D. Do some in-depth research and figure out how this came about. Hint, they already sell Apple computers so this shouldn't be too hard. Call investor relations.
Finally, plug it all into some equation that projects the share price into the future and you have your very own edifying article. Congratulations!
Beltway Greg
8-13-2008 @ 9:30PM
Rich said...
Does anyone know when the iPhone will be available to Verizon customers
8-14-2008 @ 11:14AM
Beltway Greg said...
Probably 2010. BTW, Fanboys and Fangirls global banking giant HSBC is considering purchasing 300K IPhones and ditching the Blackberry. It really is just a matter of time.